2020 (8) TMI 258

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.... AO) for the A.Y. 2007-08 vide order dated 27.11.2009 under section 143(3) of the Income-tax Act, 1961 (hereinafter 'the Act'). The penalty was levied by Dy. Commissioner of Income Tax, Circle-9(1) under section 271(1)(c) of the Act vide order dated 21.05.2010. 2. The first issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in levying penalty under section 271(1)(c) of the Act on disallowance of rent payment made by assessee without deducting TDS under section 40(a)(ia) of the Act amounting to Rs. 61,72,064/-. For this, assessee has raised the following grounds: - "(l) PENALTY 0N DISALLOWANCE OF RS. 61,72,064/- OUT OF RENT U/S. 40(a)(ia). (l) The learned CIT(A)-19, Mumbai [referred as....

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....attract penalty provisions under section 271(1)(c) of the Act in view of the precedent of ITAT Ahmadabad Bench in the case of ITO vs. Shri Vishal Madusudanbhai Chokshi 2014 (1) TMI 910, wherein it is held as under: - "Deletion of penalty u/s 271(1)(c) of the Act - Held that:- The Assessing Officer has nowhere alleged that the payment of interest made to finance company on which the TDS was deductable is non genuine or bogus - It is also a fact that there is nothing on record or alleged that the payment of interest is excessive or unreasonable - The disallowance has been made for non-deduction of TDS in view of provisions of section 40(a)(ia) - The legal fiction created by section 40(a)(ia) will not attract penalty for furn....

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....e particulars to bonafide mistake, Tribunal rightly uphold the order of CIT(A), deleting the penalty, therefore, this Tax Appeal merits no consideration as question of law is to be determined. Hence, same is dismissed." 5. From the above, we noted that the issue is squarely covered. Once, there is non-deduction of TDS on any expenditure disallowance is made but genuineness is not in doubt, penalty u/s 271(1)(c) of the Act cannot be attracted and hence, on this issue, we delete the penalty and allow the appeal of the assessee. 6. Coming to the second issue in this appeal of assessee, we noted that the AO levied the penalty on the rent received of Rs. 4,34,123/- not declared and following are the rent received: - (a) Midtech Pvt. ....